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Competitive Strengths

We believe that the following are our principal strengths:

We are a leading integrated metal producing company with multiple sale points across the steel value chain and currently operate two “Ore to metal” integrated steel manufacturing plants, one in Sambalpur, Odisha and one in Jamuria, West Bengal which are forward and backward integrated. The integrated nature of our operations enable us to maintain greater control over our operating margins.

The following diagram depicts our integrated operations:Strategic location of our manufacturing plants supported by robust infrastructure leading to cost and time efficiencies

Our products primarily comprise of (i) long steel products which range from intermediate products such as iron pellets, sponge iron and billets and final products such as TMT and structural products; and (ii) ferro alloys. The forward and backward integration of our manufacturing plants have resulted in multiple points of sale across the steel value chain and provided us with flexibility to sell intermediate products as well as use them for captive consumption, depending on the demand. This has resulted in a diversified product mix which we believe has reduced our dependency on a particular product and de-risked our income streams.

Strong financial performance and credit ratings

We have delivered consistent growth both in terms of financial and operational metrics. Our long term debt and short term debt are currently rated as CARE A+; (Stable) (Single A Plus; Outlook: Stable) and CARE A1+ (A One Plus) respectively by CARE.Our total income increased at a CAGR of 48.14%from `17,464.94 million in Fiscal 2016 to `38,326.99 million in Fiscal 2018, while our EBITDA increased at a CAGR of 124.47% from `1,417.60 million in Fiscal 2016 to `7,142.61million in Fiscal 2018. As of March 31, 2018, our gearing was 0.30 which was one of the lowest amongst our competitors(Source: CRISIL Report). Our interest coverage ratio was one of the highest amongst our competitors (Source: CRISIL Report). Our RoCE for Fiscals 2016, 2017 and 2018 were (3.32)%, 2.75% and 19.58% respectively.

Experienced Board and senior management team

We are led by an experienced Board who have extensive knowledge and understanding of the metal industry and have the expertise and vision to scale up our business. Our whole time Directors have an average metal industry experience of more than 20 years. Our Chairman, Mahabir Prasad Agarwal, is responsible for strategic planning and overall administration of our Company. Our Vice Chairman and Managing Director, Brij Bhushan Agarwal, is responsible for implementing our future growth strategies. Our Joint Managing Director, Sanjay Kumar Agarwal, is responsible for the entire production process at our manufacturing plants. Our wholetime Director Deepak Kumar Agarwal is responsible for the finance functions, while Dev Kumar Tiwari and Bhagwan Shaw are responsible for the Sambalpur manufacturing plant, S K Sachan and Sumit Chakravorty are responsible for the Jamuria and Mangalpur manufacturing plants.

Our Board is supported by our senior management team, who have an average metal industry experience of more than 10 years and some of them have been associated with our Company since our formative years. Our Board and senior management team are also supported by a workforce of 7,636 personnel which included 4,186 whole time employees and 3,450 contract employees as of May 31, 2018. We believe our manufacturing plants operate in areas with highly skilled and low cost labour, which helps us to keep our operating costs low.